Silver Prices on the Rise: Why Is It Surging and What to Expect Next?

Silver prices are staging one of the most interesting moves in the commodities market today. While gold usually grabs all the media headlines, silver has begun to show bullish volatility that has reawakened the interest of both retail and institutional investors.

But what factors are really driving this rally? Is this trend sustainable, or are we looking at a bubble? In this article, we analyze the reasons behind the silver price increase and the outlook for the medium term.

3 Key Reasons Why Silver Is Rising

The current rally is no coincidence. It responds to a “perfect storm” where macroeconomics intersects with physical supply and demand fundamentals.

1. Industrial Demand and Green Energy

Unlike gold, silver has a dual personality: it is money, but it is also a critical industrial input. The global energy transition is the main bullish driver:

• Solar Panels: Photovoltaic technology requires silver to conduct electricity. With the boom in renewables, especially in China, demand in this sector has skyrocketed.
• Electric Vehicles (EVs): Manufacturing electric cars consumes significantly more silver than internal combustion engine vehicles.

2. Supply Deficit: Physical Silver Scarcity

According to the latest data from the Silver Institute, the global silver market has entered a structural deficit. We have gone years without significant investment in new mines.

The key stat: Global demand has outpaced mining supply and recycling, which is draining inventories in London and New York vaults. When supply falls and demand rises, the silver price tends to react to the upside.

3. The Dollar and Interest Rates

Silver trades inversely to the US dollar. When the Federal Reserve (Fed) signals the end of interest rate hikes or the market anticipates cuts, the dollar weakens. This makes silver cheaper for international buyers, increasing buying pressure.